Launched on 12/08/2014, the iShares MSCI ACWI Low Carbon Target ETF (CRBN) is a smart beta exchange traded fund offering broad exposure to the World ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is sponsored by Blackrock. It has amassed assets over $395.53 million, making it one of the larger ETFs in the World ETFs. This particular fund seeks to match the performance of the MSCI ACWI Low Carbon Target Index before fees and expenses.
The MSCI ACWI Low Carbon Target Index is designed to address two dimensions of carbon exposure ? carbon emissions and potential carbon emissions from fossil fuel reserves.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for CRBN are 0.20%, which makes it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 2.94%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
When you look at individual holdings, Apple Inc (AAPL) accounts for about 2.90% of the fund's total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN).
CRBN's top 10 holdings account for about 14.1% of its total assets under management.
Performance and Risk
The ETF has lost about -23.04% and is down about -13.20% so far this year and in the past one year (as of 04/03/2020), respectively. CRBN has traded between $89.44 and $133.75 during this last 52-week period.
CRBN has a beta of 0.99 and standard deviation of 18.74% for the trailing three-year period, which makes the fund a low risk choice in the space. With about 1380 holdings, it effectively diversifies company-specific risk.
IShares MSCI ACWI Low Carbon Target ETF is a reasonable option for investors seeking to outperform the World ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
IShares ESG MSCI EM ETF (ESGE) tracks MSCI Emerging Markets ESG Focus Index and the iShares ESG MSCI USA ETF (ESGU) tracks MSCI USA ESG Focus Index. IShares ESG MSCI EM ETF has $1.87 billion in assets, iShares ESG MSCI USA ETF has $3.42 billion. ESGE has an expense ratio of 0.25% and ESGU charges 0.15%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the World ETFs.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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iShares MSCI ACWI Low Carbon Target ETF (CRBN): ETF Research Reports
Microsoft Corporation (MSFT): Free Stock Analysis Report
Amazon.com, Inc. (AMZN): Free Stock Analysis Report
Apple Inc. (AAPL): Free Stock Analysis Report
iShares ESG MSCI EM ETF (ESGE): ETF Research Reports
iShares ESG MSCI USA ETF (ESGU): ETF Research Reports
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.